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Wall Street returned to its see-sawing mode after commencing the year on a bright note. This attests to fact that change is the only constant in the stock market. The moment we settle down with market trends and expect stability, something usually always happens to shake us out of complacency. This time around, qualms about a conceivable trade war with China, reactions to Facebook (FB - Free Report) data breach and apprehensions surrounding further rate hikes by the Fed are keeping Wall Street’s roller-coaster ride going.

However, every cloud has a silver lining and so does each market gyration. We are talking about the U.S. economy here, which appears to be in decent shape, given that the unemployment rate still at a 17-year low, consumer spending is favorable and government expenditure is rising. Well, a strengthening labor market may lead to gradual wage acceleration, and in turn provide a stimulus to consumer confidence. These optimistic sentiments are expected to result in increased consumer spending that grew 4% in the fourth quarter of 2017, marking its highest improvement since the fourth quarter of 2014.

Clearly, these factors speak positively about the Consumer Discretionary sector, which typically performs well in a maturing economic cycle. On that note, we picked some consumer discretionary stocks that gained more than 20% in three months, even amid the volatility of the market.

Investing in the Sector is a Good Idea

Housing stocks from miscellaneous spaces like textile-apparel, media, television cable, leisure and recreation among others, the sector is currently ranked among the top 44% of the 16 Zacks sectors. As spending on discretionary items depends on consumers’ desire, the aforementioned metrics make us hopeful about the prospects of this diversified sector, which is also likely to gain from the recent tax reforms.

Further, with just a few weeks to go for another earnings season, we remain quite encouraged about the projections for the Consumer Discretionary sector. Markedly, the sector is anticipated to witness year-over-year bottom-line growth of 7.1% on a 6.8% jump in revenues, per the latest Earnings Outlook. Notably, this fares much better than the previous quarter where earnings climbed 0.8%, whereas revenues advanced 4.6%.

That said, we picked four top-ranked Consumer Discretionary stocks, which are likely to keep their robust show on. Backed by sound fundamentals and positive estimate revisions, these stocks are surely to be a valuable addition to your portfolio. Moreover, these stocks carry a favorable Growth Style Score, thereby doubling the treat. Growth stocks have solid earnings or revenue growth potential, which should lead to higher stock prices. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy) provide the best returns.

4 Prominent Picks

California-based, Guess?, Inc. (GES - Free Report) with a splendid earnings surprise history, is a solid bet. Driven by its stellar past record, the company has soared 32.8% over the past three months, beating the industry’s 3.2% rise. With a Growth Score of A and a long-term earnings growth rate of 17.5%, we expect this apparel and accessories designer, marketer and distributor to reach greater heights. Notably, Guess? which saw its estimates for the current quarter and fiscal year improve in the last 30 days, sports a Zacks Rank #1. You can seethe complete list of today’s Zacks #1 Rank stocks here.

Investors can also place bets on Casa Systems, Inc. (CASA - Free Report) which has seen its stock rally 46.4% in three months, as against the industry that declined 15.4%. We remain optimistic about this provider of digital cable video and broadband services, which has a Growth Score of B. Moreover, the Zacks Rank #2 (Buy) company has witnessed positive estimate revisions for the current quarter and full year over the past 60 days.

You may also consider Bluegreen Vacations Corporation (BXG - Free Report) , which manages and markets the Bluegreen Vacation Club – a vacation ownership program. The stock flaunts a Zacks Rank #1 and has a Growth Score of B. Further, Boot Barn has seen estimates for the current year go up from $1.23 to $1.30 in the past 60 days. Notably, the company had a superb bull run over the past three months, with its shares up 23.5%, as against the industry’s 3.9% drop.

Finally, we suggest taking a look at Texas-based, Tailored Brands, Inc. (TLRD - Free Report) . This specialty retailer of men's suits and provider of tuxedo rental product delivered an average positive bottom-line surprise of 50.9% in the trailing four quarters and carries a Zacks Rank #2. Moreover, the company has emerged as a viable bet with a long-term earnings growth rate of 16.5% and a Growth Score of A. With estimates for the current quarter and fiscal moving north in the past 30 days, the company has returned 25.3% in three months, surpassing the industry’s rise of 3.2%.

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At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +25.26% per year. These returns cover a period from January 1, 1988 through December 3, 2018. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month. A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.

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